Keeping track of travel costs is essential to both traveller and finance teams. Is it time to reboot the system for more clarity and ease of use?

14 August, 2020

Filling in a travel expense claim is never anyone's favourite job. All those receipts and bits of paper to gather together but it's important for employees to ensure they are not out of pocket and it's particularly important for businesses to keep track of travel costs.

The way travel is booked varies between companies, with some opting for internal travel managers, while others use corporate booking tools or simply booking directly with suppliers, or a mixture. Whatever way it's done all those costs need to be gathered in one place to keep track of exactly what costs are being incurred for any travel.

Finance managers often don't see all the travel expenses together, particularly if multiple ways of booking are used, so find it hard to really estimate the full cost of any trip and evaluate if there are any ways to cut costs. This is particularly difficult when dealing with expenses in arrears and large unexpected claims suddenly appear that throw out those cashflow forecasts.

By gathering expense information into one place with a good T&E system, businesses get a bigger picture of their travel costs. Often they find they are spending a lot with one particular supplier which gives them some great leverage when it comes to negotiating lower prices. In addition, it will give clarity on whether they are paying duplicate invoices or fraudulent expense claims.

According to SAP Concur research some 68% of finance managers are not confident that employees comply with company T&E policies. What is even more worrying is that 78% are not confident that travel managers thoroughly check every claim made by an employee.

When it comes to collating all those expenses before and after a trip, the earlier the finance team receives all the information the better. In addition to compliance there is a need to audit expenses and evaluate if any VAT can be reclaimed. If a business doesn't have the full picture of where the employee went and exactly what expenses were incurred, they are unlikely to be able to claim for any VAT. In the UK, SAP Concur estimate that businesses are missing out on about 54% of the VAT they are entitled to reclaim on travel costs.

CHART - The earlier a business has visibility of travel costs, the better, but almost three quarters are only seeing travel costs after trips have been bookedSource: SAP Concur 'Connecting the Dots on Business Spend: Don't Wait for the Pieces to Fall into Place' whitepaper

In these days of Covid-19, knowing where your employee is at any time is even more important than ever, so it's essential to have a clear picture of their travel movements which also helps to keep control of travel spend.

Employees may be cautious about travelling in this new world so they need to know that they have the full support of a company should flights get cancelled, borders close or quarantine restrictions suddenly brought in. Being flexible and understanding how to change plans quickly is essential, as well as equipping employees with the relevant tools to help them change their bookings should the need arise.

Travelling across time zones will often mean a traveller can't contact their travel manager when the need suddenly arises to change itinerary so must be able to act and have the tools and knowledge to enable that.

There are a number of travel and expense travel management apps available and they can certainly make life easier both for the traveller and the finance manager. Combining in one place the ability to book travel as well as record expenses helps everyone, whether the traveller on the move or the finance manager trying to make sense of all the costs.

Keeping travel and expense policies up to date is essential regardless of whether a business uses an app or any other system for collating travel expenses. In these changing times travellers need to know what is permitted and what is not an acceptable travel expense. Information should be included on how the business handles any out-of-policy spend or non-compliant expenses as well as what to do in an emergency.

With business travel having taken a short hiatus, now is a good time for companies to re-evaluate how they handle travel expense claims to make life easier both for the traveller and the finance manager.